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Advanced SearchFrom “economic man” to behavioral economics
When we
make decisions, we make mistakes. We all know this from personal experience, of
course. But in case we didn’t, a stream of experimental evidence in recent
years has documented the human penchant for error. This line of research is
probably best known for its offshoot, behavioral economics. Its practitioners
have played a major role in business, government, and financial markets. But
that isn’t the only useful way to think about making decisions. The academic
arena alone contains two other distinct schools of thought, one of which has a
formal name—decision analysis—and the other of which can be characterized as
demonstrating that we humans aren’t as dumb as we look. Each school of thought
brings vital insights to bear. Managers need to understand when to make
decisions formally, when to make them by the seat of their pants, and when to
blend those approaches. This article briefly tells the story of where the three
schools arose and how they have interacted, beginning with the explosion of
interest in the field during and after World War II and continuing to the
present day, when companies such as Chevron have hundreds of decision analysts
on staff. Its aim is to make readers more-informed consumers of decision
advice— which in turn should make them better decision makers. [ABSTRACT FROM
AUTHOR]
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Penerbit | Harvard Business School Publications : Boston., May 2015 |
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p. 78 - 85
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0017-8012
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